China Clears the Way for Uber, Didi to Operate Legally

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07/28 20:08

Though ride-hailing services like Uber and Didi have been operational in China for some time, the government there officially gave its blessing to the nascent industry this week, releasing national guidelines covering the rules and regulations of online ridesharing.

"While the details of how these regulations are implemented will fall to cities and provinces, this is a welcome step in a country that has consistently shown itself to be forward-thinking when it comes to innovation," Liu Zhen, Head of Strategy for Uber China, wrote in a blog post.

According to Bloomberg, the rules go into effect in November.

China is one of several markets where ride-hailing apps face legal challenges, The New York Times reports. Last year, regulators there banned all programs from using drivers who lacked taxi licenses, forcing the companies to use car-rental companies.

Uber has had its offices raided and was accused of operating unlicensed taxi services, but it currently operates in more than 60 Chinese cities, and plans to expand into another 30 soon. By the end of the year, it aims to be running in more than 100 cities across the country.

Main adversary Didi Chuxing, meanwhile, operates in 400 cities and offers taxis, private cars, ride-sharing, and other services. It facilitates more than 11 million rides per day or 1.43 billion in 2015.

Founded in 2012 as Didi Dache, it merged with rival service Kuaidi last year to become Didi Chuxing. In May, Apple announced a $1 billion investment in the Chinese taxi start-up.

"The rules legalized online car-booking services at the national level for the first time, marking a milestone in China's endeavor toward steady and healthy development of the rideshare industry," Didi Chuxing told the Times. "We believe the rules will usher in a new stage of growth for China's online ride-booking system."

Uber is certainly crossing its fingers. "In every city where we operate, riders, drivers, and city planners embrace the benefits that Uber's platform offers," Zhen said. "We look forward to working with national and local governments to put these regulatory guidelines into practice."

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